Apple cuts revenue forecast as iPhone sales slump

Apple shares fell on open yesterday as CEO Tim Cook revealed revised revenue guidance for the first quarter of 2019

Abhinav Davuluri, CFA 3 January, 2019 | 6:00PM
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Yesterday,  Apple (AAPL) released a letter from CEO Tim Cook with revised revenue guidance for Apple’s fiscal 2019 first quarter. Specifically, revenue is now expected to be US$84 billion versus a prior range of US$89 billion to US$93 billion.

The new revenue figure implies a 5% year-over-year decline. The chief culprit was Greater China, as most of the firm’s revenue shortfall to its guidance stemmed from the region across iPhone, Mac, and iPad. Cook cited a softer economic environment combined with rising trade tensions between China and the United States.

In contrast, non-iPhone segments; services, Mac, iPad, and wearables, combined to grow nearly 19% year over year. Positively, services revenue is expected to be $10.8 billion during the December quarter, which implies 28% year-over-year growth and was significantly above our prior estimates.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Apple Inc148.85 USD-0.31Rating

About Author

Abhinav Davuluri, CFA

Abhinav Davuluri, CFA  Abhinav Davuluri is a senior equity analyst for Morningstar.

 

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